UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): November 2, 2015
THE CLOROX
COMPANY
(Exact name of registrant
as specified in its charter)
| Delaware |
1-07151 |
31-0595760 |
| (State or other jurisdiction of |
(Commission File Number) |
(I.R.S. Employer |
| incorporation) |
|
Identification
No.) |
1221 Broadway, Oakland,
California 94612-1888
(Address of principal executive offices) (Zip
code)
(510) 271-7000
(Registrant's telephone
number, including area code)
Not applicable
(Former name or former
address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
[ ] Written
communications pursuant to Rule 425 Under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item 2.02 Results
of Operations and Financial Condition
On November 2, 2015, The Clorox Company issued
a press release announcing its financial results for its first quarter ended
September 30, 2015. The full text of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
Attached hereto as Exhibit 99.2 and
incorporated herein by reference is supplemental financial information.
Item 9.01 Financial Statements and
Exhibits
(d) Exhibits
| |
Exhibit |
|
Description |
| |
99.1 |
|
Press Release dated November 2, 2015 of The Clorox
Company |
| |
99.2 |
|
Supplemental information regarding financial
results |
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
|
THE CLOROX
COMPANY |
| |
| |
| Date: |
November 2,
2015 |
By: |
/ s/ Laura Stein |
|
|
|
|
Executive Vice
President – |
|
|
|
General
Counsel |
THE CLOROX COMPANY
FORM 8-K
INDEX TO EXHIBITS
| Exhibit |
Description |
| 99.1 |
Press Release
dated November 2, 2015 of The Clorox Company |
| 99.2 |
Supplemental
information regarding financial results |
| PRESS RELEASE |
 |
| |
|
Clorox Reports 3
Percent Sales Growth and 20 Percent EPS Growth in Q1; Confirms Fiscal Year 2016
Outlook
OAKLAND, Calif., Nov. 2, 2015
– The Clorox Company (NYSE:CLX) today reported sales growth of 3 percent and a
20 percent increase in diluted net earnings per share (EPS) from continuing
operations for its first quarter, which ended September 30, 2015. On a
currency-neutral basis, first-quarter sales grew 6 percent.
“Our strategy continues to
drive profitable growth, with strong sales increases in all our U.S. businesses
and margin expansion in each of our business segments, including International,”
said Chief Executive Officer Benno Dorer. “Notably, increased brand investment,
including product innovation, is delivering meaningful value to consumers,
resulting in category growth and the highest quarterly gain in total U.S. market
share in three years.”
All results in this press
release are reported on a continuing operations basis, unless otherwise stated.
As previously announced, Corporación Clorox de Venezuela S.A. (Clorox Venezuela)
discontinued operations effective Sept. 22, 2014. For the current and year-ago
quarters, the results from Clorox Venezuela are included in discontinued
operations in the company’s financial statements. Some information in this
release is reported on a non-GAAP basis. See “Non-GAAP Financial Information”
below and the tables toward the end of this press release for more information
and reconciliations of key first-quarter fiscal year 2016 and fiscal year 2015
results to the most directly comparable financial measures calculated in
accordance with generally accepted accounting principles in the U.S. (GAAP).
Fiscal First-Quarter
Results
Following is a summary of key
first-quarter results. All comparisons are with the first quarter of fiscal year
2015, unless otherwise stated.
| * |
|
$1.32 diluted EPS (20%
increase) |
| * |
|
3% volume growth |
| * |
|
3% sales
growth |
In the first quarter, Clorox
delivered earnings from continuing operations of $173 million, or $1.32 diluted
EPS, compared to $145 million, or $1.10 diluted EPS, in the year-ago quarter.
First-quarter diluted EPS results reflect higher sales and gross margin
expansion. First quarter diluted EPS also reflects a comparison to a one-time
benefit of 5 cents in the year-ago quarter related to a change in the company’s
long-term disability plan.
In the first quarter, total
company sales grew 3 percent, reflecting increases across all U.S. businesses,
driven by strong volume growth and the benefit of price increases. First-quarter
sales results also reflect 3 percentage points of unfavorable foreign currency
exchange rates and higher trade promotion spending. Volume for the first quarter
increased 3 percent.
The company’s first-quarter
gross margin increased 220 basis points to 45 percent from 42.8 percent in the
year-ago quarter, driven primarily by the benefits of cost savings; higher
sales, which reflect strong volume growth and price increases; and favorable
commodity costs. These factors were partially offset by higher manufacturing and
logistics costs.
“Continued productivity gains
and robust cost savings drove another quarter of significant margin expansion,”
said Chief Financial Officer Steve Robb. “Importantly, our investments to
deliver profitable growth continue to drive strong results. We’ll continue
focusing on cost savings programs and efficiencies across our operations so we
can reinvest in innovation platforms to fuel growth.”
First-quarter net cash
provided by continuing operations was $135 million, compared with $234 million
in the year-ago period. The year-over-year change reflects higher earnings from continuing operations in the current quarter, which were more than offset by
unfavorable changes in working capital, including higher performance-based
employee incentive compensation payments related to the company’s strong fiscal
year 2015 results, the timing of customer collections and higher tax payments.
Another contributing factor was a $15 million contribution to the company’s U.S.
pension plan in the current quarter.
In the first quarter, the
company repurchased about 1 million shares of its common stock at a cost of
about $112 million to offset stock option dilution.
Key Segment
Results
Following is a summary of key
first-quarter results from continuing operations by reportable segment. All
comparisons are with the first quarter of fiscal year 2015, unless otherwise
stated.
Cleaning
(Laundry, Home Care,
Professional Products)
| ● |
5% volume
growth |
|
|
| ● |
6% sales
growth |
|
|
| ● |
20% pretax earnings
growth |
Segment volume growth was
driven primarily by gains across a number of Home Care brands, including strong
growth of Clorox® disinfecting wipes behind increased merchandising support for the
back-to-school season. Importantly, innovation in wipes products, including
Clorox® Micro Scrubbers, Clorox® ScrubSingles and
Clorox® Triple Action Dust Wipes, contributed to category growth and
market share gains. Professional Products also contributed to segment volume
growth, with increases across a number of health care and cleaning brands. Sales
outpaced volume primarily due to the benefit of the February 2015 price increase
on Clorox bleach, partially offset by higher trade promotion spending. Pretax
earnings growth reflected higher sales as well as the benefits of favorable
commodity costs and strong cost savings. These factors were partially offset by
incremental demand-building investments and higher manufacturing and logistics
costs.
Household
(Bags and Wraps, Charcoal, Cat
Litter)
| ● |
1% volume
growth |
|
|
| ● |
5% sales
growth |
|
|
| ● |
58% pretax earnings
growth |
Segment volume growth was
driven primarily by gains in the Charcoal business, largely due to strong
consumption and merchandising activity related to Labor Day, partially offset by
decreased shipments in Cat Litter, reflecting continued competitive activity.
The Bags and Wraps business also contributed to segment volume growth, with
distribution gains and increased merchandising support behind innovation in
premium trash bags, including new Glad® OdorShield®
with Gain®
scent. Segment sales outpaced
volume due to favorable mix and the benefit from the November 2014 price
increase in Bags & Wraps as consumers traded up to premium trash bags.
Pretax earnings growth reflected higher sales, the benefit of favorable
commodity costs and strong cost savings. These factors were partially offset by
higher manufacturing and logistics costs.
Lifestyle
(Dressings and Sauces, Water
Filtration, Natural Personal Care)
| ● |
8% volume
growth |
|
|
| ● |
7% sales
growth |
|
|
| ● |
5% pretax earnings
growth |
Segment volume growth
reflected increases across all businesses. In Dressings and Sauces, volume gains
were driven primarily by higher shipments of bottled Hidden Valley®
dressings, which include new flavored ranch products. Natural Personal Care
delivered double-digit volume growth behind product innovation in face products,
strength in towelettes and the earlier timing of holiday gift pack shipments.
Water Filtration also contributed strongly to segment volume growth due to
increased merchandising behind pour-through products. Volume outpaced sales
primarily due to higher trade promotion spending. Pretax earnings growth was
driven primarily by higher sales and the benefit of cost savings, partially
offset by incremental demand-building investments.
Page 2 of 10
International
(All sales outside of the
U.S.)
| ● |
Flat
volume |
|
|
| ● |
8% sales decrease (5%
growth, currency-neutral basis) |
|
|
| ● |
23% pretax earnings
growth |
Segment volume results reflect
gains in Mexico and Canada, offset by lower shipments in certain other Latin
American countries. Volume outpaced sales largely due to the impact of
unfavorable foreign currency exchange rates, with double-digit declines across
most countries, partially offset by the benefit of price increases. On a
currency neutral basis, segment sales grew 5 percent. Pretax earnings grew $6
million, reflecting the benefits of price increases, cost savings as a result of
the International business driving productivity gains to rebuild margin, and
favorable mix. These factors were partially offset by the impact from
unfavorable foreign currency exchange rates and higher manufacturing and
logistics costs, primarily driven by continued inflation.
Clorox Confirms Fiscal Year
2016 Outlook
| ● |
Flat to 1% sales growth
(3% to 4% growth, currency-neutral basis) |
|
|
| ● |
25 basis points to 50
basis points of EBIT margin expansion |
|
|
| ● |
$4.68 to $4.83 diluted
EPS range |
Clorox continues to anticipate
delivering flat to 1 percent sales growth, which reflects about 3 points of
incremental sales growth from product innovation for the fiscal year. The
company’s sales outlook also reflects expected moderation from slowing
international economies as well as 3 percentage points of impact from
unfavorable foreign currency exchange rates, of which more than half the impact
reflects an anticipated significant devaluation of the Argentine peso. The
company continues to anticipate fiscal year sales to be impacted by an increase
in trade-promotion spending to drive the company’s core business and trial of
new products.
Clorox continues to anticipate
EBIT margin expansion in the range of 25 to 50 basis points, primarily driven by
normalized levels of performance-based incentive costs, the benefit of cost
savings, some benefit from price increases and slightly lower commodity costs.
The company continues to anticipate these factors to be partially offset by a
greater impact from unfavorable foreign currency exchange rates and continued
high inflation affecting manufacturing and logistics costs. Fiscal year EBIT
margin is also expected to be impacted by incremental investments in demand
building programs and the company’s cost savings pipeline to drive profitable
growth.
Clorox continues to anticipate its effective fiscal year 2016 tax rate
to be between 34 percent and 35 percent.
Net of all these factors, Clorox
continues to anticipate fiscal year 2016 diluted EPS from continuing operations
in the range of $4.68 to $4.83.
“Looking forward, we’ll stay
the course with our 2020 Strategy, as we face the global challenges of worsening
foreign currencies and slowing international economies,” Dorer said. “In
addition, we anticipate further pressure from competitors in the second half of
the fiscal year as they respond to our market share gains. Notwithstanding these
challenges, we have a healthy core business and we remain committed to driving
growth profitably.”
For More Detailed Financial
Information
Visit the company’s
Financial Reporting: Financial
Results section of the company’s
website at TheCloroxCompany.com for
the following:
| ● |
Supplemental unaudited
volume and sales growth information |
|
|
| ● |
Supplemental unaudited
gross margin driver information |
|
|
| ● |
Supplemental unaudited
reconciliation of certain non-GAAP financial information, including
earnings from continuing operations before interest and taxes (EBIT) and
earnings from continuing operations before interest, taxes, depreciation
and amortization (EBITDA) |
|
|
| ● |
Supplemental unaudited
balance sheet and cash flow information and free cash flow
reconciliation |
|
|
| ● |
Supplemental
price-change information |
Page 3 of 10
Note: Percentage and
basis-point changes noted in this press release are calculated based on rounded
numbers. Supplemental materials are available in the Investors: Financial
Reporting: Financial Results section of the company’s website at TheCloroxCompany.com.
The Clorox
Company
The Clorox Company (NYSE: CLX)
is a leading multinational manufacturer and marketer of consumer and
professional products with about 7,700 employees worldwide and fiscal year 2015
sales of $5.7 billion. Clorox markets some of the most trusted and recognized
consumer brand names, including its namesake bleach and cleaning products;
Pine-Sol® cleaners; Liquid Plumr® clog removers; Poett® home care products;
Fresh Step® cat litter; Glad® bags, wraps and containers; Kingsford® charcoal;
Hidden Valley® dressings and sauces; Brita® water-filtration products and Burt's
Bees® natural personal care products. The company also markets brands for
professional services, including Clorox Healthcare® and Clorox Commercial
Solutions®. More than 80 percent of the company's sales are generated from
brands that hold the No. 1 or No. 2 market share positions in their categories.
Clorox is a signatory of the
United Nations Global Compact, a community of global leaders committed to
sustainability. The company has been broadly recognized for its corporate
responsibility (CR) efforts, including, most recently, two U.S. EPA Climate
Leadership Awards for Excellence and inclusion among the top 40 companies on the
2015 Newsweek Green Rankings and CR magazine's 100 Best Corporate Citizens 2015
list. The Clorox Company and The Clorox Company Foundation contributed
approximately $15 million in combined cash grants, product donations, cause
marketing and employee volunteerism in the past fiscal year. For more
information, visit TheCloroxCompany.com, the
CR Matters Blog and follow the company on Twitter at
@CloroxCo.
Forward-Looking
Statements
This press release contains
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and such forward-looking statements involve risks and uncertainties.
Except for historical information, statements about future volumes, sales,
foreign currencies, costs, cost savings, margins, earnings, earnings per share,
diluted earnings per share, foreign currency exchange rates, cash flows, plans,
objectives, expectations, growth, or profitability, are forward-looking
statements based on management's estimates, assumptions and projections. Words
such as "could," "may," "expects," "anticipates," "targets," "goals,"
"projects," "intends," "plans," "believes," "seeks," "estimates," and variations
on such words, and similar expressions that reflect our current views with
respect to future events and financial performance, are intended to identify
such forward-looking statements. These forward-looking statements are only
predictions, subject to risks and uncertainties, and actual results could differ
materially from those discussed. Important factors that could affect performance
and cause results to differ materially from management's expectations are
described in the sections entitled "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2015, as updated
from time to time in the company's SEC filings. These factors include, but are
not limited to: intense competition in the company's markets; worldwide,
regional and local economic conditions and financial market volatility; the
ability of the company to drive sales growth, increase price and market share,
grow its product categories and achieve favorable product and geographic mix;
risks related to international operations, including political instability;
government-imposed price controls or other regulations; foreign currency
exchange rate controls, including periodic changes in such controls,
fluctuations and devaluations; labor claims, labor unrest and inflationary
pressures, particularly in Argentina; and potential harm and liabilities from
the use, storage and transportation of
Page 4 of 10
chlorine in certain international markets where chlorine is used in the production of bleach; risks related to the possibility of nationalization, expropriation of assets or other government action in foreign jurisdictions; risks related to the company's discontinuation of operations in Venezuela; volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs; supply disruptions and other risks inherent in reliance on a limited base of suppliers; the ability of the company to develop and introduce commercially successful products; dependence on key customers and risks related to customer consolidation and ordering patterns; costs resulting from government regulations; the ability of the company to successfully manage global, political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; risks related to reliance on information technology systems, including potential security breaches, cyber-attacks or privacy breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, or service interruptions; risks relating to acquisitions, new ventures and divestitures, and associated costs, including the potential for asset impairment charges related to, among others, intangible assets and goodwill; the success of the company's business strategies; the ability of the company to implement and generate anticipated cost savings and efficiencies; the impact of product liability claims, labor claims and other legal proceedings, including in foreign jurisdictions and the company's litigation related to its discontinued operations in Brazil; the company's ability to attract and retain key personnel; the company's ability to maintain its business reputation and the reputation of its brands; environmental matters, including costs associated with the remediation of past contamination and the handling and/or transportation of hazardous substances; the impact of natural disasters, terrorism and other events beyond the company's control; the company's ability to maximize, assert and defend its intellectual property rights; any infringement or claimed infringement by the company of third-party intellectual property rights; the effect of the company's indebtedness and credit rating on its operations and financial results; the company's ability to maintain an effective system of internal controls; uncertainties relating to tax positions, tax disputes and changes in the company's tax rate; the accuracy of the company's estimates and assumptions on which its financial statement projections are based; the company's ability to pay and declare dividends or repurchase its stock in the future; and the impacts of potential stockholder activism.
The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to sales growth, diluted EPS, EBIT and EBIT margin. The company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations.
The company disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company’s results reported in accordance with GAAP, including income taxes, interest income, interest expense and foreign exchange impact. The exclusion of foreign exchange impact is also referred to as currency-neutral. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company’s operations and are useful for period-over-period comparisons as they show currency-neutral sales comparisons and the company uses such financial measures in its budgeting process and as factors in determining compensation. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.
Media Relations
Aileen Zerrudo (510) 271-3075, aileen.zerrudo@clorox.com
Kathryn Caulfield (510)
271-7209, kathryn.caulfield@clorox.com
Page 5 of 10
Investor Relations
Landon Dunn (510) 271-7256,
landon.dunn@clorox.com
Steve Austenfeld (510)
271-2270, steve.austenfeld@clorox.com
For recent presentations
made by company management and other investor materials, visit Investor Events on the company’s website.
Page 6 of 10
Condensed Consolidated
Statement of Earnings (Unaudited)
Dollars in millions, except
share amounts
|
Three Months
Ended |
|
9/30/2015 |
|
9/30/2014 |
| Net
sales |
$ |
1,390 |
|
|
$ |
1,352 |
|
| Cost
of products sold |
|
765 |
|
|
|
774 |
|
| Gross profit |
|
625 |
|
|
|
578 |
|
| |
| Selling and administrative expenses |
|
186 |
|
|
|
180 |
|
| Advertising costs |
|
123 |
|
|
|
121 |
|
| Research and development costs |
|
30 |
|
|
|
30 |
|
| Interest expense |
|
23 |
|
|
|
26 |
|
| Other (income) expense, net |
|
(1 |
) |
|
|
3 |
|
| Earnings from continuing operations before
income taxes |
|
264 |
|
|
|
218 |
|
| Income taxes on continuing operations |
|
91 |
|
|
|
73 |
|
| Earnings from continuing operations |
|
173 |
|
|
|
145 |
|
| Losses from discontinued operations, net of
tax |
|
(1 |
) |
|
|
(55 |
) |
| Net
earnings |
$ |
172 |
|
|
$ |
90 |
|
| |
| Net
earnings (losses) per share |
|
|
|
|
|
|
|
| Basic |
|
|
|
|
|
|
|
| Continuing
operations |
$ |
1.34 |
|
|
$ |
1.12 |
|
| Discontinued
operations |
|
(0.01 |
) |
|
|
(0.42 |
) |
| Basic
net earnings per share |
$ |
1.33 |
|
|
$ |
0.70 |
|
| |
| Diluted |
|
|
|
|
|
|
|
| Continuing
operations |
$ |
1.32 |
|
|
$ |
1.10 |
|
| Discontinued
operations |
|
(0.01 |
) |
|
|
(0.42 |
) |
| Diluted
net earnings per share |
$ |
1.31 |
|
|
$ |
0.68 |
|
| |
| Weighted average shares outstanding (in
thousands) |
|
|
|
|
|
|
|
| Basic |
|
129,155 |
|
|
|
129,312 |
|
| Diluted |
|
131,220 |
|
|
|
131,369 |
|
Page 7 of 10
Reportable Segment
Information
(Unaudited)
Dollars in millions
|
Net sales |
|
Earnings (losses) from continuing
operations
before income
taxes |
|
Three Months Ended |
|
|
|
|
Three Months Ended |
|
|
|
|
9/30/2015 |
|
9/30/2014 |
|
% Change (1) |
|
|
9/30/2015 |
|
9/30/2014 |
|
% Change
(1) |
| Cleaning |
$ |
497 |
|
$ |
470 |
|
6 |
% |
|
$ |
149 |
|
|
$ |
124 |
|
|
20 |
% |
| Household |
|
411 |
|
|
392 |
|
5 |
% |
|
|
82 |
|
|
|
52 |
|
|
58 |
% |
| Lifestyle |
|
231 |
|
|
216 |
|
7 |
% |
|
|
59 |
|
|
|
56 |
|
|
5 |
% |
| International |
|
251 |
|
|
274 |
|
-8 |
% |
|
|
32 |
|
|
|
26 |
|
|
23 |
% |
| Corporate |
|
- |
|
|
- |
|
- |
|
|
|
(58 |
) |
|
|
(40 |
) |
|
45 |
% |
| Total |
$ |
1,390 |
|
$ |
1,352 |
|
3 |
% |
|
$ |
264 |
|
|
$ |
218 |
|
|
21 |
% |
(1) Percentages
based on rounded numbers.
Page 8 of 10
Condensed Consolidated
Balance Sheet
Dollars in
millions
|
9/30/2015 |
|
6/30/2015 |
|
9/30/2014 |
|
(Unaudited) |
|
|
|
(Unaudited) |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
|
|
|
|
| Cash
and cash equivalents |
$ |
383 |
|
|
$ |
382 |
|
|
$ |
355 |
|
| Receivables,
net |
|
472 |
|
|
|
519 |
|
|
|
455 |
|
| Inventories,
net |
|
408 |
|
|
|
385 |
|
|
|
397 |
|
| Other
current assets |
|
147 |
|
|
|
143 |
|
|
|
144 |
|
| Total
current assets |
|
1,410 |
|
|
|
1,429 |
|
|
|
1,351 |
|
| Property, plant and equipment, net |
|
885 |
|
|
|
918 |
|
|
|
947 |
|
| Goodwill |
|
1,052 |
|
|
|
1,067 |
|
|
|
1,087 |
|
| Trademarks, net |
|
533 |
|
|
|
535 |
|
|
|
539 |
|
| Other intangible assets, net |
|
49 |
|
|
|
50 |
|
|
|
60 |
|
| Other assets |
|
166 |
|
|
|
165 |
|
|
|
166 |
|
| Total assets |
$ |
4,095 |
|
|
$ |
4,164 |
|
|
$ |
4,150 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Notes
and loans payable |
$ |
131 |
|
|
$ |
95 |
|
|
$ |
53 |
|
| Current
maturities of long-term debt |
|
300 |
|
|
|
300 |
|
|
|
575 |
|
| Accounts
payable |
|
419 |
|
|
|
431 |
|
|
|
385 |
|
| Accrued
liabilities |
|
464 |
|
|
|
548 |
|
|
|
478 |
|
| Income
taxes payable |
|
37 |
|
|
|
31 |
|
|
|
42 |
|
| Total
current liabilities |
|
1,351 |
|
|
|
1,405 |
|
|
|
1,533 |
|
| Long-term debt |
|
1,796 |
|
|
|
1,796 |
|
|
|
1,596 |
|
| Other liabilities |
|
741 |
|
|
|
750 |
|
|
|
762 |
|
| Deferred income taxes |
|
88 |
|
|
|
95 |
|
|
|
90 |
|
| Total
liabilities |
|
3,976 |
|
|
|
4,046 |
|
|
|
3,981 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
159 |
|
|
|
159 |
|
|
|
159 |
|
| Additional paid-in capital |
|
790 |
|
|
|
775 |
|
|
|
702 |
|
| Retained earnings |
|
1,993 |
|
|
|
1,923 |
|
|
|
1,731 |
|
| Treasury shares |
|
(2,282 |
) |
|
|
(2,237 |
) |
|
|
(2,007 |
) |
| Accumulated other comprehensive net
loss |
|
(541 |
) |
|
|
(502 |
) |
|
|
(416 |
) |
| Stockholders’ equity |
|
119 |
|
|
|
118 |
|
|
|
169 |
|
| Total liabilities and stockholders’
equity |
$
|
4,095 |
|
|
$
|
4,164 |
|
|
$
|
4,150 |
|
Page 9 of 10
The tables below
present the reconciliation of non-GAAP financial measures to the most directly
comparable financial measures calculated in accordance with GAAP and other
supplemental information. See “Non-GAAP Financial Information” above for further
information regarding the company’s use of non-GAAP financial
measures.
The
reconciliations below are on a
continuing operations basis
First-Quarter Sales Growth Reconciliation
|
Q1
Fiscal |
|
Q1
Fiscal |
|
2016 |
|
2015 |
| Total Sales Growth
(GAAP) |
2.8 |
% |
|
0.6 |
% |
| |
|
|
|
|
|
| Less: Foreign exchange |
-2.8 |
% |
|
-1.9 |
% |
| |
|
|
|
|
|
| Currency-Neutral Sales Growth
(Non-GAAP) |
5.6 |
% |
|
2.5 |
% |
The reconciliations below for
fiscal year 2015 are provided as a reference point for the
fiscal year 2016 outlook.
Fiscal Year EBIT Margin(1) Reconciliation
Dollars in millions
|
FY
Fiscal
2015 |
| Earnings from continuing
operations |
$
|
921 |
|
| before income taxes
(GAAP) |
|
|
|
| |
|
|
|
| Interest Income |
|
-4 |
|
| Interest Expense |
|
100 |
|
| |
|
|
|
| EBIT (1)
(non-GAAP) |
$
|
1,017 |
|
| |
|
|
|
| Net
Sales |
$
|
5,655 |
|
| |
|
|
|
| EBIT margin(1) (non-GAAP) |
|
18.0 |
% |
(1)
EBIT represents earnings
from continuing operations before interest and
taxes. EBIT margin is the ratio of EBIT to
net sales.
For Gross Margin
Drivers, please refer to the Supplemental Information: Gross Margin Driver page
in the Financial Results section of the company’s website TheCloroxCompany.com.
Page 10 of 10
|
 |
| The Clorox Company |
|
Supplemental Unaudited
Condensed Information –
Volume Growth
Reportable
Segments |
%
Change vs. Prior Year |
|
| FY15 |
FY16 |
Major
Drivers of
Change
|
| Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
|
| Cleaning |
-1% |
3% |
1% |
7% |
2% |
5% |
Q1 increase driven by higher shipments across a
number of brands in Home Care
including double-digit growth of Clorox®
disinfecting wipes, and in the Professional Products businesses’ cleaning and health care
brands, partially offset by
lower shipments of Clorox® liquid bleach due to
the February 2015 price increase. |
| Household |
4% |
3% |
0% |
2% |
2% |
1% |
Q1 increase driven by higher shipments in the
Charcoal business due to strong
merchandising related to the U.S.
Labor Day holiday, and Bags and Wraps from consumers trading up to premium trash bags,
including new Glad® OdorShield ® with Gain scent,
partially offset by lower shipments of Cat Litter due to competitive activity. |
| Lifestyle |
0% |
5% |
2% |
0% |
1% |
8% |
Q1 increase was across all three businesses driven
primarily by higher shipments of bottled Hidden
Valley® salad dressings, including new flavored ranch items,
Brita® pour through systems and filters, as well as Burt’s Bees® face products and the earlier timing of holiday gift pack
shipments. |
| International |
5% |
5% |
1% |
2% |
3% |
0% |
Q1 was flat driven by higher shipments in Mexico and Canada, offset by lower shipments in certain other Latin American countries. |
| Total
Company |
1% |
4% |
1% |
3% |
2% |
3% |
|
Supplemental Unaudited
Condensed Information – Sales Growth
Reportable
Segments |
%
Change vs. Prior Year |
|
| FY15 |
FY16 |
Major
Drivers of
Change
|
| Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
|
| Cleaning |
-2% |
3% |
1% |
9% |
3% |
6% |
Q1 variance between volume and sales driven
by the benefit of the February 2015 price
increase on Clorox® liquid bleach
partially offset by higher trade promotion spending. |
| Household |
5% |
5% |
5% |
4% |
5% |
5% |
Q1 variance between volume and sales driven
by favorable mix in Charcoal, as well as
Bags and Wraps, which included consumers trading up to premium trash bags
behind product innovation, and the
benefit of the November 2014 price
increase in Bags and Wraps. |
| Lifestyle |
-1% |
4% |
3% |
0% |
1% |
7% |
Q1 variance between volume and sales driven
by higher trade promotion spending. |
| International |
0% |
-2% |
0% |
0% |
-1% |
-8% |
Q1 variance between volume and sales driven by unfavorable foreign currency exchange rates, partially
offset by the benefit of price increases. |
| Total
Company |
1% |
3% |
3% |
4% |
3% |
3% |
|
|
|
| The Clorox Company |
|
Supplemental Unaudited
Condensed Information –
Gross
Margin
Drivers
The table below provides details on the drivers of gross margin change
versus the prior year.
|
Gross
Margin Change vs. Prior Year (basis points) |
| Driver |
FY15 |
FY16 |
|
Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
| Cost Savings |
+120 |
+130 |
+170 |
+160 |
+140 |
+140 |
| Price Changes |
+90 |
+100 |
+140 |
+110 |
+110 |
+110 |
| Market Movement
(commodities) |
-40 |
-90 |
- |
+100 |
- |
+100 |
| Manufacturing &
Logistics |
-170 |
-90 |
-120 |
-80 |
-110 |
-120 |
| All other |
-70 |
-40 |
-80 |
-20 |
-50 |
-10 |
| Change vs prior
year |
-70 |
+10 |
+110 |
+270 |
+90 |
+220 |
| Gross
Margin (%) |
42.8% |
42.5% |
43.2% |
45.6% |
43.6% |
45.0% |
|
|
| The Clorox Company |
|
Supplemental Information – Balance
Sheet
(Unaudited)
As of September 30,
2015
Working Capital Update
Dollars in Millions and
percentages based on rounded numbers
|
Q1 |
|
Q1 |
|
|
FY 2016 |
FY 2015 |
Change |
Days
(5) |
Days
(5) |
|
|
|
|
|
FY 2016 |
FY 2015 |
Change |
| Receivables, net |
$472 |
$455 |
$17 |
32 |
33 |
-1 |
| Inventories |
$408 |
$397 |
$11 |
47 |
46 |
1 |
| Accounts payable (1) |
$419 |
$385 |
$34 |
49 |
47 |
2 |
| Accrued liabilities |
$464 |
$478 |
-$14 |
|
|
|
| Total WC (2) |
$107 |
$91 |
$16 |
|
|
|
| Total WC % net sales (3) |
1.9% |
1.7% |
|
|
|
|
| Average WC (2) |
$72 |
$119 |
-$47 |
|
|
|
| Average WC % net sales (4) |
1.3% |
2.2% |
|
|
|
|
| (1) |
Days of accounts
payable is calculated as follows: average accounts payable / [(cost of
products sold + change in inventory) / 90]. |
| (2) |
Working capital (WC)
is defined in this context as current assets minus current liabilities
excluding cash and short-term debt, based on end of period balances.
Average working capital represents a two-point average of working
capital. |
| (3) |
Represents working
capital at the end of the period divided by annualized net sales
(current quarter net sales x
4). |
| (4) |
Represents a
two-point average of working capital divided by annualized net sales
(current quarter net sales x
4). |
| (5) |
Days calculations
based on a two-point average. |
Supplemental Information – Cash
Flow
(Unaudited)
For the quarter ended
September 30, 2015
Capital expenditures for the
first quarter were $28 million versus $29 million in the year-ago
quarter.
Depreciation and amortization
for the first quarter was $41 million versus $43 million in the year ago
quarter.
Net cash provided by
continuing operations in the first quarter was $135 million, or 10 percent of
sales.
|
|
| The Clorox Company |
|
Supplemental Unaudited Condensed
Information
Q1 Fiscal Year 2016 Free Cash Flow
Reconciliation
Dollars in Millions and
percentages based on rounded numbers
|
|
Q1 |
|
Q1 |
|
|
Fiscal |
|
Fiscal |
|
|
Year |
|
Year |
| |
|
2016 |
|
2015 |
| Net cash provided by
continuing operations – GAAP |
|
$135 |
|
$234 |
| Less: Capital expenditures |
|
$28 |
|
$29 |
| Free cash flow –
non-GAAP (1) |
|
$107 |
|
$205 |
| Free cash flow as
a percent of sales – non-GAAP (1) |
|
7.7% |
|
15.2% |
| Net
sales |
|
$1,390 |
|
$1,352 |
| (1) |
In accordance with
the SEC's Regulation G, this schedule provides the definition of certain
non-GAAP measures and the reconciliation to the most closely related GAAP
measure. Management uses free cash flow and free cash flow as a percent of
sales to help assess the cash generation ability of the business and funds
available for investing activities, such as acquisitions, investing in the
business to drive growth, and financing activities, including debt
payments, dividend payments and share repurchases. Free cash flow does not
represent cash available only for discretionary expenditures, since the
Company has mandatory debt service requirements and other contractual and
non-discretionary expenditures. In addition, free cash flow may not be the
same as similar measures provided by other companies due to potential
differences in methods of calculation and items being
excluded. |
|
|
| The Clorox Company |
|
Supplemental unaudited
reconciliation of earnings from continuing operations before income taxes to
EBIT(1)(3) and EBITDA (2)(3)
Dollars in millions and
percentages based on rounded numbers
|
|
FY 2015 |
|
|
FY 2016 |
| |
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY |
|
|
Q1 |
|
|
9/30/14 |
|
12/31/14 |
|
3/31/15 |
|
6/30/15 |
|
6/30/15 |
|
|
9/30/15 |
Earnings from
continuing operations
before income
taxes |
|
$218 |
|
$197 |
|
$217 |
|
$289 |
|
$921 |
|
|
$264 |
| Interest income |
|
-$1 |
|
-$1 |
|
-$1 |
|
-$1 |
|
-$4 |
|
|
-$1 |
| Interest expense |
|
$26 |
|
$26 |
|
$25 |
|
$23 |
|
$100 |
|
|
$23 |
| EBIT (1)(3) |
|
$243 |
|
$222 |
|
$241 |
|
$311 |
|
$1,017 |
|
|
$286 |
| EBIT margin
(1)(3) |
|
18.0% |
|
16.5% |
|
17.2% |
|
20.0% |
|
18.0% |
|
|
20.6% |
| Depreciation and amortization |
|
$43 |
|
$42 |
|
$41 |
|
$43 |
|
$169 |
|
|
$41 |
| EBITDA
(2)(3) |
|
$286 |
|
$264 |
|
$282 |
|
$354 |
|
$1,186 |
|
|
$327 |
| EBITDA margin (2)(3) |
|
21.2% |
|
19.6% |
|
20.1% |
|
22.7% |
|
21.0% |
|
|
23.5% |
| Net
sales |
|
$1,352 |
|
$1,345 |
|
$1,401 |
|
$1,557 |
|
$5,655 |
|
|
$1,390 |
| |
| Total debt (4) |
|
$2,224 |
|
$2,672 |
|
$2,166 |
|
$2,191 |
|
$2,191 |
|
|
$2,227 |
| Debt to EBITDA
(3)(5) |
|
1.9 |
|
2.3 |
|
1.9 |
|
1.8 |
|
1.8 |
|
|
1.8 |
| (1) |
EBIT (a non-GAAP
measure) represents earnings from continuing operations before income
taxes (a GAAP measure), excluding interest income and interest expense, as
reported above. EBIT margin is the ratio of EBIT to net
sales. |
| |
| (2) |
EBITDA (a non-GAAP
measure) represents earnings from continuing operations before income
taxes (a GAAP measure), excluding interest income, interest expense,
depreciation and amortization, as reported above. EBITDA margin is the
ratio of EBITDA to net sales. |
| |
| (3) |
In accordance with
the SEC's Regulation G, this schedule provides the definition of certain
non-GAAP measures and the reconciliation to the most closely related GAAP
measure. Management believes the presentation of EBIT, EBIT margin,
EBITDA, EBITDA margin and debt to EBITDA provides additional useful
information to investors about current trends in the
business. |
| |
| (4) |
Total debt represents
the sum of notes and loans payable, current maturities of long-term debt,
and long-term debt. |
| |
| (5) |
Debt to EBITDA (a
non-GAAP measure) represents total debt divided by EBITDA for the trailing
four quarters. |
| |
|
|
The Clorox Company
Updated: 11-02-15 |
|
U.S. Retail Pricing Actions from
CY2010 - CY2015
| Brand / Product |
|
Average Price Change |
|
Effective Date |
| Home Care |
|
|
|
|
| Green Works®
cleaners |
|
-7 to -21% |
|
May 2010 |
| Formula 409® |
|
+6% |
|
August 2011 |
| Clorox Clean-Up®
cleaners |
|
+8% |
|
August
2011 |
| Clorox® Toilet Bowl Cleaner |
|
+5% |
|
August 2011 |
| Liquid-Plumr®
products |
|
+5% |
|
August
2011 |
| Pine-Sol® cleaners |
|
+17% |
|
April 2012 |
| Clorox Clean-Up®
, Formula 409® , |
|
|
|
|
| and
Clorox® Disinfecting Bathroom |
|
|
|
|
| spray
cleaners |
|
+5% |
|
March 2013 |
| Green
Works® cleaners |
|
+21% |
|
July
2014 |
| Laundry |
|
|
|
|
| Green
Works® liquid detergent |
|
approx. -30% |
|
May
2010 |
| Clorox® liquid bleach |
|
+12% |
|
August 2011 |
| Clorox 2® stain fighter and color |
|
|
|
|
| booster |
|
+5% |
|
August 2011 |
| Clorox® liquid bleach |
|
+7% |
|
February 2015 |
| Glad |
|
|
|
|
| Glad® trash bags |
|
+5% |
|
August 2010 |
| Glad® trash bags |
|
+10% |
|
May
2011 |
| Glad® wraps |
|
+7% |
|
August 2011 |
| Glad® food bags |
|
+10% |
|
November 2011 |
| GladWare® disposable containers |
|
+8% |
|
July
2012 |
| Glad® trash bags |
|
+6% |
|
March
2014 |
| Glad® ClingWrap |
|
+5% |
|
March
2014 |
| Glad® trash bags |
|
+6% |
|
November 2014 |
| Glad® wraps |
|
+5% |
|
January 2015 |
| Litter |
|
|
|
|
| Cat
litter |
|
-8 to
-9% |
|
March
2010 |
| Cat
litter |
|
+5% |
|
May
2012 |
| Food |
|
|
|
|
| Hidden Valley Ranch® salad |
|
|
|
|
| dressing |
|
+7% |
|
August 2011 |
| Charcoal |
|
|
|
|
| Charcoal and lighter fluid |
|
+8 to
10% |
|
January 2012 |
| Charcoal |
|
+6% |
|
December 2012 |
| Brita |
|
|
|
|
| Brita® pitchers |
|
+3% |
|
August 2011 |
| Brita® pitchers and filters |
|
+5% |
|
July
2012 |
| Natural Personal Care |
|
|
|
|
| Burt’s Bees® lip balm |
|
+10% |
|
July
2013 |
Notes:
| ● |
Individual SKUs vary within the
range. |
| ● |
This communication
reflects pricing actions on primary items, and does not reflect pricing
actions on our Professional Products business.
|
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